The Petition
The Lysine Fair Trade Coalition and its individual members ("Petitioners") filed a new petition with the U.S. Department of Commerce ("DOC") and the U.S. International Trade Commission ("ITC") seeking the imposition of antidumping ("AD") and countervailing duties ("CVD") on imports of L-lysine from the People's Republic of China. Petitioners allege that these imports are being dumped in the U.S. market and are also benefiting from unfair government subsidies.
Lysine is an amino acid that is added to animal feed to promote the biosynthesis of proteins. It is typically produced through fermentation of a strain of bacteria with a supply of dextrose. Lysine is added to animal feed to achieve the desired protein balance and blend. Lysine is produced in multiple interchangeable forms that may be in a dry or liquid state. Different forms of lysine include: (1) liquid (base) lysine, (2) lysine monohydrochloride ("lysine HCL"), (3) lysine sulfate, and (4) dry lysine produced in encapsulated or coated form.
Liquid (base) lysine is semi-viscous and dark in color. Liquid lysine is a concentrated form of L-lysine in an aqueous solution with the molecular formula C6H14N2O2. Liquid lysine normally contains at least 50 percent lysine by weight. Lysine HCL is a white, free-flowing, crystalline-like powder that can dissolve in water. Lysine HCL in dry form has the molecular formula molecular formula C6H14N2O2HC1. Lysine HCL contains a minimum of 78 percent lysine by weight. Lysine sulfate is a granular-like substance and is tan in color. Lysine sulfate is the sulfate salt of lysine, and in the dry form, it has the molecular formula C6H16N2O6S. Lysine sulfate contains a minimum of at least 40% lysine but may contain as much as 50 or 60 percent lysine, by weight. Lysine can also come in an encapsulated or coated form that is about the size of a pebble and is used for feeding ruminants.
Please see below for the full text of the proposed scope for the investigations.
Key Facts
Petitioner: Lysine Fair Trade Coalition and individual members
Foreign Producers/Exporters and U.S. Importers: Please contact Clark Hill's international trade team for a listing of individual importers and exporters named in the petition.
AD/CVD margins: Petitioner alleged the following AD and CVD margins:
- China: AD margin of 197.1%, ad valorem, and a CVD margin above de minimis.
The Investigation
The U.S. Department of Commerce ("DOC") and the U.S. International Trade Commission ("ITC") will conduct investigations. The ITC will determine if there is a reasonable indication that the imports are injuring or threatening to injure the U.S. industry. The DOC will then determine whether imports are being dumped or unfairly subsidized and will calculate corresponding AD and CVD duty margins that importers will need to pay on their entries.
Importers will be required to deposit the calculated AD/CVD duties on their imports as of the date that the DOC publishes its affirmative preliminary determination in the Federal Register. In this case, the DOC's preliminary determinations are currently expected by Aug. 21 (CVD) and Nov. 4 (AD). Importers should be aware that entries may be subject to cash deposits before these dates if the DOC finds that there is a surge of imports after the petition was filed.
Next Steps
All U.S. importers and foreign producers are advised to prepare as soon as possible due to the strict statutory deadlines in these investigations. If this product is of interest to you, please contact Clark Hill's international trade team so that we can provide you with additional information.
A schedule of approximate key dates is attached below.
The Scope
This investigation pertains to L-lysine. The following language describes the imported merchandise that Petitioners intend to cover in these investigations:
The scope of this investigation covers animal feed grade L-lysine ("lysine"). Lysine is an essential amino acid added to animal feed that is used in the biosynthesis of proteins. The scope covers lysine regardless of form, including lysine monohydrochloride, also referred to as lysine HCL, lysine sulfate, and liquid lysine. The scope includes lysine that has been coated or encapsulated for use with ruminants to ensure bioavailability.
Lysine HCL in the dry form has the molecular formula C6Hi4N202HC1. The Chemical Abstracts Service (CAS) registry number for lysine HCL is 657-27-2. Lysine HCL contains a minimum of 78 percent lysine by weight, as well as additional amino acids, carbohydrates, mineral salts, and organic acids. Lysine sulfate is the sulfate salt of lysine, and in the dry form, it has the molecular formula C6Hi6N206S. The CAS registry number for lysine sulfate is 60343-69-3. Lysine sulfate typically contains approximately 40-70 percent lysine by weight, as well as additional amino acids, carbohydrates, mineral salts, and organic acids. Liquid lysine is a concentrated form of lysine in an aqueous solution with the molecular formula C6Hi4N202. The CAS registry number for liquid lysine is 56-87-1. Liquid lysine normally contains at least 50 percent lysine by weight, as well as additional amino acids, carbohydrates, mineral salts, and organic acids.
The scope includes lysine that is combined with other products, including for example, by mixing, blending, compounding, or granulating (e.g., base mixes, premixes, and concentrates). For such combined products, only the lysine component is covered by the scope of this investigation.
Subject merchandise also includes lysine that has been processed in a third country, including by commingling, diluting, adding or removing additives, refining, converting from liquid to dry or dry to liquid form, coating or encapsulating, or performing any processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the subject country.
The merchandise covered by this investigation is properly classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 2922.41.0090. Lysine may also be classified under HTSUS subheadings 2922.41.0010, 2922.49.4950, and 2309.90.9500. Although the HTSUS subheadings and the CAS registry numbers are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
